The Network Brokerage Role of Small States, Quasi States

Kirsten Martinus, Thomas Sigler, Iacopo Iacopini, Ben Derudder


Small and quasi states are uniquely placed in the global economic network, being relatively low populous island-states, small enclaves and/or city-states. They have become increasingly important over the last 50 or so years, in many cases as tax havens and/or regional financial and logistical centres. Their smallness implies limited-to-no resource wealth of their own, and that they often provide services to other nations and global markets. Nonetheless, many compete in global markets alongside large economic nations by providing specialised or ‘brokering’ services of knowledge, information, or trade. As such, they provide interesting sites to explore how the relational and spatial components of their networks have been leveraged for economic advantage. Despite this, there is little research on how such states have historically borrowed economic size from the global market nor how they are positioned in global economic networks. Using a social network analysis of the locational connections between approximately 700,000 firm headquarter and their subsidiary links from 13 of the world’s largest stock exchanges, this presentation explores the brokerage role of Luxembourg, Singapore, Hong Kong, and Panama. Drawing on Gould and Fernandez (1989) five broker types of coordinator, consultant, gatekeeper, representative, and liaison, we present a more nuanced understanding of small regions as ‘gateways’ and operationalise the brokerage concept in the context of global networks. Our findings demonstrate brokerage is defined by the unique economic function and history of small and quasi states, with their exact role in the global economy dependent on the actor and economic configurations that have been established over time.

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